It would be nice if you need not write a rent check each month. Nothing can make you feel safer than owning a house, provided that buying a home will not result in financial problems of its own. Every year, a new wave of first time home buyers hits the trail in search of their humble abode. There are pros and cons to home buying. Certainly, there is the matter of timing and related financing programs.
Let us discuss the key monetary costs associated with home buying to stack up against your monthly rent check. Here are points to consider when deciding on buying versus renting.
- Owning a home means gaining equity. If the owner keeps the house long enough for it to rise above the initial cost of its purchase, then that is profit. This is one of the most essential and superb matters associated with home ownership.
- When you buy a home it brings sense of accomplishment and pride. It is also a chance to express your style and personal taste. You can enjoy freedom with home ownership.
- Buying a home also lets you have insight as a part of a permanent community. On the other hand, in a rented apartment or home, one might feel temporary and less involved.
Now, let us discuss financial considerations on buying versus renting.
- When buying a home, with your every monthly payment, you are putting money into savings. On the contrary, when you rent a home you have to give money to the landlord it is an expense. Every time you pay a mortgage, a percentage goes toward your equity. Indeed, this is similar to having money in your bank account, which you can draw upon later when needed. Every year, rental rates increase and the principle on your mortgage is decreasing with every payment. Further, the housing market continues to grow and hence the valuations of homes.
- Owning a home also comes with some interesting tax benefits. Each interest payment made is accounted in your tax deduction later. The same is not true with your rental payment.
With all the above points, buying a home certainly sounds great! However, it is not for everyone. Every coin has 2 sides and we have to think about every aspect before getting into home ownership. Of course, we don't want it to be our nightmare. When it comes to buying a home, it is a complicated, time-consuming and of course, costly endeavor. Let us think about the responsibilities involved in buying vs. renting.
- Buying a home requires an investment of time. As a tenant, you can enjoy more freedom to move about the country. As a home owner, you have to think about and manage the leaking pipes, pruning hedges, mowing lawns, and lots more to keep all things running smoothly.
- When it comes to buying a home, many small home improvements can keep adding up as expenses. Sometimes, you might need to pay for utilities that would be covered in a rental agreement.
- When you rent a home and find that you are not happy with the locality or your new neighborhood, then you can find a place somewhere else. You can take a decision to shift somewhere else instantly depending upon your rental agreement. Imagine a similar case with home buying. You cannot sell out your home instantly. You have to wait till you get a good deal for your home, along with the expenses invested in it.
Weighing the advantages and disadvantages of buying and renting a home can be challenging. Definitely, the above considerations may vary from person to person. You have to think about your financial condition and think about the effects of the decision you make in the future. Do not forget to take responsibilities into account while counting benefits of any aspect. This will definitely help you make a smart decision that will give you the best return on your investment